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A few thoughts on energy:
1) oil prices have held at the high end of a range for some time now which
suggests some equilibrium has been achieved in the market
2) it is only recently that spending on development projects has risen and
there is considerable lead time in bringing production on line ... see
charts of service stocks. There is, to date, scant evidence that increased
development can do much more than maintain current production levels. For
example, production is declining in the vast oil fields of Saudi Arabia.
Russia is becoming the swing producer making up for declines in other
international fields.
3) Asia, China in particular, is becoming a larger force in the consumption
of petroleum products. China is now importing significant quantities of oil
from the ME and is taking a larger political interest.
4) Major Liquefied Natural Gas projects are in the works, however current
facilities and the very specialized LNG tanker fleet are insufficient to
make a major dent. It will likely be about 2 years before LNG can supply a
significant portion of US demand.
5) I think odds are high that there will be a gradual reprising of petroleum
products (oil, NG, and LNG) to a basket of currencies including dollar, yen,
and euro. This is inevitable should dollar weakness continue on a long term
basis, and I believe it will. This should serve to put some upward pressure
on products priced in US$.
Earl
----- Original Message -----
From: "Charles Marchand" <c_r@xxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Monday, October 06, 2003 7:45 AM
Subject: Re: [RT] The Top Is In
> Ref oil and gas -- an industry analyst recently observed that oil
> projects currently in development world wide will raise production above
> the expected growth in demand over the next few years. As for natural
gas,
> there are large reserves in the Mid-East, North Africa and Southeast Asia
> that are currently "stranded" for lack of access to markets. At $4 to $5
> an MCFG it is economic to liquify this gas and build the tankers and
> terminals to move it to US and European markets. Domestic $1.5--$2 gas
> might be gone, but there is plenty available internationally at higher
> prices. Of course, this will raise the trade deficit.
>
> Oil is priced in dollars. The question is, given the declining
> value of the dollar, will producing nations be content with OPEC's
> $22--$28/BO price target? Also, will non-OPEC nations, particularly
> Russia, voluntarily restrict export to support OPEC pricing. Mexico and
> Norway have done so in the past.
>
> Charles Marchand
>
> At 08:07 AM 10/4/2003 -0600, you wrote:
> >Stick with the plan, whatever it was! If you were bearish (or bullish) on
> >the intermediate term fundamentals of the market, did a couple of weeks
of
> >decline (or rally) change the fundamentals? If not, then assess the
> >technicals. Has the intermediate term technical picture changed radically
> >during the past few weeks? If the fundamentals have not changed
> >significantly and the intermediate term technicals have not changed
> >significantly, then stick with the plan. If one or both have changed
> >significantly, then adjust the plan.
> >
> >I see a market which is fundamentally very over valued, an economy which
is
> >running on whatever air the government can pump into the credit system, a
> >world in which is the US$ is over priced and over extended, and a world
in
> >which oil and gas is in flat to declining production. I see a stock
market
> >in which the intermediate term rally is running out of gas, currency
markets
> >in which the dollar is in an established downtrend, and credit markets
which
> >are in turmoil within an established uptrend.
> >
> >I began scaling into an intermediate term put position on the last rally
and
> >will continue doing so should we get new highs ... I am now confident
that
> >there is far more downside risk than upside opportunity in the stock
market.
> >I have been holding intermediate term positions in Yen or Euro for some
> >months and will be adding to positions on the current dollar bounce. I
have
> >muni bond positions which are yielding close to 7% tax free and have no
> >plans to cash them in. I have gas and oil trusts which are yielding close
to
> >12%, with large capital gains to boot, and have not plans to sell until
we
> >are well into winter. I also have sizeable cash positions for shopping
when
> >opportunities arise. The point is, if one has a sound plan, one sticks
with
> >it.
> >
> >Earl
> >
> >----- Original Message -----
> >From: <jvc689@xxxxxxx>
> >To: <Realtraders@xxxxxxxxxxxxxxx>
> >Sent: Friday, October 03, 2003 11:24 AM
> >Subject: [RT] The Top Is In
> >
> >
> > >
> > > And just when some of you folks had me convinced...KABOOM! Now what to
do
> > > with all that cash and nothing I like to short. Ideas?
> > >
> > > On the real reason for this post...I now think the top is not in if
the
> > > close is above previous high close.
> > >
> > > Sincerely,
> > >
> > > John
> >
> >
> >
> >To unsubscribe from this group, send an email to:
> >realtraders-unsubscribe@xxxxxxxxxxxxxxx
> >
> >
> >
> >Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
>
>
>
>
> To unsubscribe from this group, send an email to:
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>
>
>
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>
>
>
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